Electrochaea Closes Series A Venture Round Led by German, Swiss and US Investors

November 4, 2014

The cleantech start-up Electrochaea has successfully closed a Series A venture round and is receiving several million Euros for further developing its power-to-gas technology and for financing the future growth of the company. The consortium consists of experienced investors from Germany, Switzerland, and the United states and includes Munich Venture Partners (Munich), b-to-v (St. Gallen/Berlin), Caliza Holding (Netstal), Focus First (St. Louis, MO/USA), KfW (Frankfurt/Bonn/Berlin), and Sirius Venture Partners (Wiesbaden/Düsseldorf).

Power-to-gas is an innovative grid-scale energy storage technology capable of storing large amounts of renewable energy from wind and solar. Electrochaea is developing a system for converting renewable energy first to hydrogen and then to methane, the principal component of natural gas, for direct injection into the existing natural gas grid. Once in the grid, the gas can be stored for an indefinite period of time and used for power production, in heating applications, or in transportation. It can also be transported geographically to demand centers via existing gas pipelines in order to alleviate power grid congestion. Electrochaea’s core expertise is in the development of a system that uses a novel biocatalytic process for the conversion of hydrogen and carbon dioxide to methane. The biocatalyst has many technical advantages that translate to lower capital and operating costs compared to conventional systems.

Dr. Martin Kröner, Managing Partner at Munich Venture Partners: “Power-to-gas is the only technology that can both store energy and distribute the energy carrier without further congesting the power grid.  Electrochaea’s biological methanation technology outcompetes conventional methods in terms of economics and dynamic operation. The management team’s technical expertise and consistent focus on market needs convinced us of the investment opportunity presented by Electrochaea.”

Christian Schütz, Partner at b-to-v, adds: “We are convinced that power-to-gas technologies will play an increasingly important role in storing excess electricity produced in a decentralized energy system. We see Electrochaea as the clear leader within the universe of biological methanation technologies. The team is highly market-driven, and their ability to bring together experienced investors to form a consortium is testament to their business acumen.”

The funds will be used to grow the international team at the new headquarters in Munich, to pursue intellectual property, and to provide equity capital to the technology demonstration project BioCat inCopenhagen (Denmark). The goal of the BioCat Project is to demonstrate Electrochaea’s technology at commercial scale (for more information: www.biocat-project.com). The project consortium includes Audi (Germany), Hydrogenics (Belgium), HMN Gashandel, NEAS Energy, BIOFOS and Insero Business Services (all Denmark).

Mich Hein, CEO of Electrochaea, remarks: “Our goal is to enter the market with a commercial product by 2016. Closing our Series A venture round has taken us one step closer to that goal. We are honored by the trust and confidence our investors place in us and look forward to working with the board on building a successful and lasting company.”

Johannes Peschko, co-founder of Sirious EcoTech Fund Düsseldorf, adds: “Electrochaea’s successful history, its professional management, and technological leadership position has convinced us to join the investor consortium. With this funding round and the projects currently in the pipeline, the company is well positioned to strengthen its leadership position in the power-to-gas market.”

The investment firm Focus First (managed by Nidus Partners), which founded Electrochaea in 2010 and has led it through its first growth stage, is also participating in the round and continues to be involved in the company’s stewardship.

The consortium is completed by KfW, a German development bank. The bank’s ERP Start-Up Fund has a broad investment mandate covering different industries, including biotech and cleantech. Investing in cleantech companies from the energy sector is becoming increasingly important for the Fund. Electrochaea therefore fits well into KfW’s current investment strategy.

Electrochaea was founded in 2010 as a spin-off from the University of Chicago. As part of the Series A, the company has relocated its headquarters to Munich (Germany) to be closer to the European key markets for power-to-gas and to more closely collaborate with its strategic partners in Germany, Denmark, Switzerland and other European countries.

About Electrochaea

Electrochaea is a cleantech start-up developing a disruptive grid-scale energy storage technology known as power-to-gas. The company’s process converts low-cost and stranded electricity into pipeline-grade renewable gas for direct injection into the existing natural gas grid. Once in the grid, the gas can be stored for weeks and months and used for power production, heating applications, or in transportation. It can also be transported geographically, thereby alleviating power grid congestion. Electrochaea is headquartered in Munich (Germany).

About b-to-v Partners

b-to-v is a venture capital firm based in St. Gallen and Berlin. With some 200 fee-paying members, it is also one of the leading networks of entrepreneurial private investors in Europe. b-to-v combines the industry expertise and experience of its members with the venture capital expertise of its own team. With this investment approach, b-to-v is committed to achieving sustained added value for its portfolio companies as well as for its investing members. Investing together and the enjoyment inherent in the mutual financial, technical and personal support from entrepreneur to entrepreneur form the core of the b-to-v philosophy. Contact for questions regarding b-to-v: Lennart Meyer, HOSCHKE & CONSORTEN Public Relations GmbH, Tel: +49 40 36 90 50-32, Email: l.meyer@hoschke.de

About Caliza

Caliza Holding AG is a Single Family Office located in Switzerland. An investment firm with international scope, Caliza is focused on acquiring interests in leading SMEs and innovative start-ups in the areas of energy, industry, and mining. Caliza strives to work with talented management teams to unlock the full potential of their companies and create long-term sustainable value.

About Focus First LP, managed by Nidus Partners

Nidus Partners LP is a unique collaboration between experienced entrepreneurs and strategic corporations to identify and commercialize innovative technologies broadly impacting the energy markets. The partnership provides seed funding, entrepreneurial experience, and market input to identify and manage the key risks in advancing early-stage technologies towards commercialization. Collaborating with corporate partners gives Nidus’ entrepreneurs insight into not only what the market needs but also early access to potential acquirers, improving the prospect of a return on investment.

About ERP Start-Up Fund, managed by KfW

KfW funds and supports start-ups, small and medium-sized enterprises, as well as initiatives for promoting growth and employment in Germany. The ERP Start-Up Fund is an investment vehicle managed and co-funded by KfW to invest in innovative, technology based companies with exceptional growth perspectives. Capital contributions by the Fund can be used for R&D, product development, or for the marketing of new products or services. Investments by KfW are typically made in collaboration with a lead investor and strictly at market terms. Since its launch in 2014, the ERP Start-Up Fund has invested approximately EUR 720 million in young technology companies.

About Munich Venture Partners

Munich Venture Partners is a venture capital firm. The company is managed by senior managers from the high technology and energy industry, and experienced venture capital professionals. As the prime partner of the Fraunhofer-Gesellschaft, one of the world’s leading organizations for applied research, Munich Venture Partners invests in selected high-tech startups in the environmental technology and energy sector.

About Sirius Venture Partners

Sirius Venture Partners GmbH, headquartered in Wiesbaden and Düsseldorf, is a venture capital company focused on technological growth markets. It concentrates on venture capital investments in companies from seed to early expansion phases with an outstanding growth potential through innovative technologies, products and business models. The group currently manages a portfolio of twenty companies in four funds. Sirius Venture Partners supports its portfolio companies in their strategic planning with its long lasting experience as entrepreneur and financier on an international scale.